Unemployment hit double digits for the first time in 26 years as more than 558,000 lost jobs in October. The jobless rate went from 9.8% to 10.2%, a leap that quadruples the increase from August to September and indicates a rapidly-worsening situation for American workers:
The unemployment rate rose from 9.8 to 10.2 percent in October, and nonfarm payroll employment continued to decline (-190,000), the U.S. Bureau of Labor Statistics reported today. The largest job losses over the month were in construction, manufacturing, and retail trade.
In October, the number of unemployed persons increased by 558,000 to 15.7 million. The unemployment rate rose by 0.4 percentage point to 10.2 percent, the highest rate since April 1983. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (10.7 percent) and whites (9.5 percent) rose in October. The jobless rates for adult women (8.1 percent), teenagers (27.6 percent), blacks (15.7 percent), and Hispanics (13.1 percent) were little changed over the month. The unemployment rate for Asians was 7.5 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks and over) was little changed over the month at 5.6 million. In October, 35.6 percent of unemployed persons were jobless for 27 weeks or more. (See table A-9.)
The civilian labor force participation rate was little changed over the month at 65.1 percent. The employment-population ratio continued to decline in October, falling to 58.5 percent. (See table A-1.)
The job losses accelerated in manufacturing. The average losses in the previous four months was 51,000 per month, but October beat that by 10,000, coming in at 61,000 jobs lost. Construction lost 62,000 in October, down slightly from the 4-month average of 67,000. Retail lost 40,000 jobs — and that may be a very bad portent for the Christmas season, which usually accounts for about 30% of all retail sales.
UPDATE: Ed Morrissey asks via email whether this has any portent for unemployment? I think it does. The investment in equipment and software may be either of a deepening or broadening variety. If you are dumping many workers you can also cut your capital budget. But if that category turns around while you are still cutting workers — the ADP projection for private sector payrolls is a loss of 203,000 jobs, above the consensus forecast of -175,000 overall jobs — that would suggest capital deepening. I think this is what’s driving increased productivity. This also means each new worker now comes with a higher “capital budget requirement”, and between that and the payroll taxes contemplated under Pelosicare you probably have a greater drag on employment than otherwise contemplated.
While these data are for the third and tomorrow’s report is for the first month of Q4, I am inclined to think we will see both a number closer to 200k for jobs lost. That might make the unemployment rate 10%.
The breaking of the psychological barrier of double-digit unemployment is a watershed moment for the Obama administration. It has continued to claim success in its Porkulus effort with shell-game “saved or created” metrics for jobs while unemployment rises unabated. Meanwhile, Obama pushed Congress to spend trillions of dollars we don’t have on efforts that have nothing to do with employment or revitalizing the economy. Even the latest CNN poll shows a 17-point swing to the worse for Obama on economics.
This is now Obama’s economy. He owns the double-digit unemployment level, having bought it with the $787 billion stimulus plan that he promised would keep unemployment no higher than 8%.
Update: From the AP:
But the loss of jobs last month exceeded economists’ estimates. It’s the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years.
Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.
Update II: Mark Tapscott calls this “a leading indicator Obama policies must change.”
Update III: Innocent Bystanders updates the Romer graph once again: